WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – JUNE 30, 2014

STOCK EXCHANGE RELEASE                      August 7, 2014 at 9:00 A.M.

WULFF GROUP PLC’S INTERIM REPORT FOR JANUARY 1 – JUNE 30, 2014: Market Situation Remained Difficult and Net Sales decreased, yet Operating Loss decreased

This is a summary of Wulff Group Plc’s interim report for January-June 2014.

Wulff Group is adopting a new disclosure procedure in accordance with Regulations and Guidelines 7/2013 (Disclosure obligation on issuers) of the Financial Supervisory Authority and is publishing the interim report for January-June 2014 as an attachment to this stock exchange release. Wulff Group’s interim report for January-June 2014 is a PDF file attachment to this stock exchange release and is available on the company’s website at the address http://www.wulff.fi/en/wulff+group+plc/home/.

KEY POINTS  JANUARY – JUNE 2014

In January-June 2014, net sales totalled EUR 37.3 million (EUR 43.5 million) and EUR 17.5 million (EUR 20.7 million) in the second quarter.

  • In January-June, EBITDA was EUR 0.12 million (EUR -0.08 million) being 0.3 percentages (-0.2 %) of net sales. In the second quarter, EBITDA was EUR -0.17 million (EUR -0.49 million) being -1.0 percentages (-2.3 %) of net sales.
  • In January-June, operating result (EBIT) amounted to EUR -0.39 (EUR -0.65 million) being -1.0 percentages (-1.5 %) of net sales. In the second quarter, operating result (EBIT) was EUR -0.42 million (EUR -0.77 million).
  • Earnings per share (EPS) was EUR -0.06 (EUR -0.11) in January-June and EUR -0.07 (EUR -0.12) in the second quarter.
  • The Group’s outlook for 2014 operating result remains unchanged.

WULFF GROUP’S CEO HEIKKI VIENOLA

Market situation has remained difficult. Significant improvement to the market situation is not to be expected in a short term period. Best growth opportunities in the field we see in Sweden and Norway. The improvement in operating result has been achieved by cost-saving procedures. It is important to continue to cut costs in order to achieve favourable development in the results. We also strongly invest in sales development and serving clients in right channels. During our over 120 year history one of strengths has been the easiness of making purchases: we are present in companies every day in a way that is the most suitable to the client. In addition to the personal service the easiness of making purchases today means diverse web based order systems and web store Wulffinkulma.fi.

GROUP’S NET SALES AND RESULT PERFORMANCE

In January-June 2014 net sales totalled EUR 37.3 million (EUR 43.5 million) and EUR 17.5 million (20.7 million) in the second quarter. In January-June EBITDA was EUR 0.12 million (EUR -0.08 million) being 0.3 percentages (-0.2 %) of net sales. In the second quarter, EBITDA was EUR -0.17 million (EUR -0.49 million) being -1.0 percentages (-2.3 %) of net sales. In January-June operating profit (EBIT) amounted to EUR -0.39 (EUR -0.65 million) being -1.0 percentages (-1.5 %) of net sales. In the second quarter operating profit (EBIT) was EUR -0.42 million (EUR -0.77 million).

In January-June 2014 employee benefit expenses amounted to EUR 8.4 million (EUR 9.5 million) and EUR 4.1 million (EUR 4.6 million) in the second quarter. Other operating expenses amounted to EUR 4.8 million (EUR 5.7 million) in January-June and EUR 2.4 million (EUR 2.8 million) in the second quarter. Employee benefit and other operating expenses were affected by the cost-saving program performed in the end of 2013. The cost-saving program is expected to achieve annual savings of 2.0 million. 

In January-June the financial income and expenses totalled (net) EUR -0.24 million (EUR -0.29 million) including interest expenses of EUR 0.1 million (EUR 0.09 million) and mainly currency-related other financial items (net) EUR -0.15 million (EUR -0.21 million). In the second quarter the financial income and expenses totalled (net) EUR -0.16 million (EUR -0.24 million).

In January-June the result before taxes was EUR -0.63 million (EUR -0.94 million) and EUR -0.57 million (EUR -1.01 million) in the second quarter. In January-June the net profit after taxes was EUR -0.52 million (EUR -0.72 million) and EUR -0.48 million (EUR -0.77 million) in the second quarter. Earnings per share (EPS) was EUR -0.06 (EUR -0.11) in January-June and EUR -0.07 (EUR -0.12) in the second quarter.

KEY FIGURES

  II II I-II I-II I-IV
EUR 1000 2014 2013 2014 2013 2013
Net sales 17 515 20 743 37 290 43 485 83 543
Change in net sales, % -15,6 % -5,9 % -14,2 % -4,1 % -7,4 %
EBITDA -167 -486 122 -79 3
EBITDA margin, % -1,0 % -2,3 % 0,3 % -0,2 % 0,0 %
Operating profit/loss -418 -769 -387 -649 -2 721
Operating profit/loss margin, % -2,4 % -3,7% -1,0 % -1,5 % -3,3 %
Profit/Loss before taxes -574 -1 005 -627 -941 -3 395
Profit/Loss before taxes margin, % -3,3 % -4,8 % -1,7 % -2,2 % -4,1 %
Net profit/loss for the period attributable to equity holders of the parent company -425 -760 -412 -731 -3 874
Net profit/loss for the period, % -2,4 % -3,7 % -1,1 % -1,7 % -4,6 %
Earnings per share, EUR (diluted = non-diluted) -0,07 -0,12 -0,06 -0,11 -0,59
Return on equity (ROE), % -3,8 % -4,5 % -4,2 % -4,2 % -25,6 %
Return on investment (ROI), % -2,5 % -3,7 % -2,5 % -3,4 % -13,9 %
Equity-to-assets ratio at the end of period, % 37,4 % 42,6 % 37,4 % 42,6 % 38,3 %
Debt-to-equity ratio at the end of period 70,2 % 47,7 % 70,2 % 47,7 % 45,4 %
Equity per share at the end of period, EUR * 1,79 2,30 1,79 2,30 1,80
Net cash flow from operating activities -564 273 -2 183 -1 618 567
Investments in non-current assets 162 70 400 535 778
Investments in non-current assets, % of net sales 0,9 % 0,3 % 1,1 % 1,2 % 0,9 %
Treasury shares held by the Group at the end of period 79 000 79 000 79 000 79 000 79 000
Treasury shares, % of total share capital and votes 1,2 % 1,2 % 1,2 % 1,2 % 1,2 %
Number of total issued shares at the end of period 6 607 628 6 607 628 6 607 628 6 607 628 6 607 628
Personnel on average during the period 282 320 282 321 311
Personnel at the end of period 269 315 269 315 295

* Equity attributable to the equity holders of the parent company / Number of shares excluding the acquired own shares

RISKS AND UNCERTAINTIES IN THE NEAR FUTURE

The demand for office supplies is still affected by the organizations’ personnel lay-offs and cost-saving initiatives made during the economic downturn. The ongoing economic uncertainties impact especially the demand for business and promotional gifts. During the uncertain economic periods, the corporations may also minimize attending fairs.

Half of the Group’s net sales come from other than euro-currency countries. Fluctuation of the currencies affect the Group’s net result, however the effect of the fluctuation is expected to be moderate.

MARKET SITUATION AND FUTURE OUTLOOK

Wulff is the most significant Nordic player in its industry. Wulff’s mission is to help its corporate customers to succeed in their own business by providing them with leading-edge products and services in a way best suitable to them. The markets have been consolidating in the past few years and the Nordic markets are expected to consolidate in the future as well. Wulff is prepared to carry out new strategic acquisitions, and as a listed company Wulff intends to be an active player.

Despite the challenging situation operating result is believed to improve in 2014 due to cost savings. Typically in the industry, the annual profit is made in the last quarter of the year.

The group continues to improve the efficiency of its operations along with the continuous renewal in order to increase the Group’s profitability and to reach its long-term financial targets. The cost-saving program performed in the end of 2013 had an expected impact to the first half year period, and it is expected to gain annual savings of EUR 2.0 million mainly in 2014.

FINANCIAL REPORTING 2014

Wulff Group Plc will release the following financial reports in 2014:

Interim Report, January-September 2014               Thursday November 6, 2014

In Vantaa on August 6, 2014

WULFF GROUP PLC

BOARD OF DIRECTORS

Further information:

CEO Heikki Vienola

tel. +358 9 5259 0050 or mobile: +358 50 65 110

e-mail: heikki.vienola@wulff.fi

DISTRIBUTION

NASDAQ OMX Helsinki Oy

Key media

www.wulff-group.com